U.K. inflation hit a 41-year high of 11.1% annually in October, as household energy bills and food prices continued to soar.
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LONDON — U.K. inflation jumped to a 41-year high of 11.1% in October, exceeding expectations as food, transport and energy prices continued to squeeze households and businesses.
Economists polled by Reuters had projected an annual increase in the consumer price index of 10.7%, and October’s print marks an increase from the 40-year high of 10.1% seen in September.
Despite the introduction of the government’s Energy Price Guarantee scheme, the Office for National Statistics said the largest upward contributions came from electricity, gas and other fuels.
“Indicative modelled consumer price inflation estimates suggest that the CPI rate would have last been higher in October 1981, where the estimate for the annual inflation rate was 11.2%,” the ONS said.
Food and non-alcoholic beverages also contributed heavily, rising by 16.4% in the 12 months to October to notch its highest annual rate since September 1977.
The country faces its longest recession on record, according to the Bank of England, while the government and central bank are attempting to coordinate the tightening of fiscal and monetary policy in order to rein in inflation.
Finance Minister Jeremy Hunt will deliver a new fiscal statement on Thursday and is expected to announce substantial tax hikes and spending cuts in a bid to plug a £50 billion-plus hole in the country’s public finances.
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